IDC predicts offshore IT services vendors will capture $29.4 billion by 2010

Indian IT Software And Services Grow By 31.4% In FY 05-06 Posting An Aggregate Revenue Of $29.6 Billion 
(Source: NASSCOM)

According to a recent IDC study, the global and U.S. markets for offshore IT services continue to grow at a remarkable rate, driven primarily by U.S. customer demand. IDC predicts that offshore IT services vendors will capture $29.4 billion in worldwide customer spending by 2010, with little sign of a market slowdown. The study also reveals a shift in the strategies of the major offshore vendors, with an increased focus on service offerings that build more operational and strategic relationships with their clients. The evolving and increasingly competitive landscape will require vendors to make significant investments in order to increase growth and achieve differentiation.

The study finds that the largest offshore vendors have begun to pose a serious threat to the top global players, as they strengthen their onshore presence, develop relationships higher up in the food chain within customer organizations, utilize new technologies, and invest in developing hosting infrastructures.

The study cites additional vendor actions that have contributed to their impressive growth:

  • Signing larger contracts
  • Expanding delivery capabilities beyond India and into China, Central and Eastern Europe, and Latin America
  • Signing strategic partnerships with technology providers such as SAP and Microsoft
  • Offering new services such as software testing

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